Project Syndicate economists + European banks | The Guardianhttp://www.theguardian.com/business/series/project-syndicate-economists+europeanbanks
Indexen-gbGuardian News and Media Limited or its affiliated companies. All rights reserved. 2015Tue, 31 Mar 2015 22:37:46 GMT2015-03-31T22:37:46Zen-gbGuardian News and Media Limited or its affiliated companies. All rights reserved. 2015The Guardianhttp://assets.guim.co.uk/images/guardian-logo-rss.c45beb1bafa34b347ac333af2e6fe23f.pnghttp://www.theguardian.com
Has an accidental currency war erupted?http://www.theguardian.com/business/blog/2015/feb/11/has-an-accidental-currency-war-erupted
<p>Even the most stability obsessed countries have made unexpected economic moves, but barriers to growth remain largely unaddressed – and central banks cannot tackle them alone</p><p><br /><strong></strong></p><p>Six and a half years after the global financial crisis, central banks in emerging and developed economies are continuing to pursue unprecedentedly activist – and unpredictable – monetary policy. How much road remains in this extraordinary journey?<br /></p><p>If weak demand and high debt were the only factors, the latest round of monetary stimulus would be straightforward</p> <a href="http://www.theguardian.com/business/blog/2015/feb/11/has-an-accidental-currency-war-erupted">Continue reading...</a>CurrenciesEuropean Central BankFederal ReserveEurozone crisisBankingEconomicsEuroEuropeEuropean UnionEuropean banksEuropean monetary unionFinancial crisisFinancial sectorUS economyWorld newsBusinessStock marketsUS marketsWed, 11 Feb 2015 10:37:23 GMThttp://www.theguardian.com/business/blog/2015/feb/11/has-an-accidental-currency-war-eruptedPhotograph: AFP/GettyAustralia, India, Mexico and others have cut interest rates.Photograph: AFP/GettyAustralia, India, Mexico and others have cut interest rates.Photograph: Hannelore Foerster/Getty ImagesThe ECB in Frankfurt. Central banks have been forced on to a policy path that is far from ideal.Photograph: Hannelore Foerster/Getty ImagesThe ECB in Frankfurt. Central banks have been forced on to a policy path that is far from ideal.Photograph: Justin Sullivan/Getty ImagesAmerica’s intricate global trade relations make it difficult to stimulate significant political support for protectionism.Photograph: Justin Sullivan/Getty ImagesAmerica’s intricate global trade relations make it difficult to stimulate significant political support for protectionism.Mohamed El-Erian2015-02-11T10:37:23ZGreece is playing to lose the debt crisis poker gamehttp://www.theguardian.com/business/2015/feb/09/greece-is-playing-to-lose-the-debt-crisis-poker-game
<p><strong>Anatole Kaletsky</strong> says Greece has shown its best cards too early and may have missed prized opportunity to end self-destructive austerity imposed on Europe by Germany</p><p><br /></p><p>The future of Europe now depends on something apparently impossible: Greece and Germany must strike a deal. What makes such a deal seem impossible is not the principled opposition of the two governments – Greece has demanded a debt reduction, while Germany has insisted that not a euro of debt can be written off – but something more fundamental: while Greece is obviously the weaker party in this conflict, it has far more at stake.<br /></p> <a href="http://www.theguardian.com/business/2015/feb/09/greece-is-playing-to-lose-the-debt-crisis-poker-game">Continue reading...</a>Eurozone crisisBankingEconomicsEuroCurrenciesEuropeEuropean Central BankFinancial sectorEuropean banksEuropean monetary unionEuropean UnionFinancial crisisWorld newsGermanyGreeceMon, 09 Feb 2015 14:36:33 GMThttp://www.theguardian.com/business/2015/feb/09/greece-is-playing-to-lose-the-debt-crisis-poker-gamePhotograph: Petros Giannakouris/AP‘New Greek finance minister Yanis Varoufakis has played his hand badly against the troika’Photograph: Petros Giannakouris/AP‘New Greek finance minister Yanis Varoufakis has played his hand badly against the troika’Project Syndicate and Anatole Kaletsky2015-02-09T14:36:33ZA Greek morality tale: why we need a global debt restructuring frameworkhttp://www.theguardian.com/business/2015/feb/04/a-greek-morality-tale-global-debt-restructuring-framework
<p>Reform of eurozone design and the policy frameworks that have resulted in the monetary union’s performance is crucial<br></p><p>When the euro crisis began half a decade ago, Keynesian economists predicted that the austerity being imposed on Greece and the other crisis countries would fail. It would stifle growth and increase unemployment – and even fail to decrease the debt-to-GDP ratio. Others – in the European commission, the European Central Bank, and a few universities – talked of expansionary contractions. But even the International Monetary Fund argued that contractions, such as cutbacks in government spending, were just that – contractionary.</p><p>We hardly needed another test. Austerity had failed repeatedly, from its early use under US president Herbert Hoover, which turned the stock-market crash into the Great Depression, to the IMF “programs” imposed on east Asia and Latin America in recent decades. And yet when Greece got into trouble, it was tried again.</p> <a href="http://www.theguardian.com/business/2015/feb/04/a-greek-morality-tale-global-debt-restructuring-framework">Continue reading...</a>GreeceEurozone crisisFinancial crisisEconomicsEuropeEuropean Central BankEuropean UnionEuropean banksEuropean monetary unionBusinessWorld newsEurozoneWed, 04 Feb 2015 14:11:50 GMThttp://www.theguardian.com/business/2015/feb/04/a-greek-morality-tale-global-debt-restructuring-frameworkPhotograph: Epoca_libera/Demotix/CorbisProtesters wave flags at a rally during a pre-election rally in Athens.Photograph: Epoca_libera/Demotix/CorbisProtesters wave flags at a rally during a pre-election rally in Athens.Joseph E Stiglitz2015-02-04T14:11:50ZDraghinomics – Abenomics, European-stylehttp://www.theguardian.com/business/2014/sep/01/draghinomics-abenomics-european-style
ECB president Mario Draghi can follow a similar economic route to Shinzo Abe's experiment in Japan. It's a risky path worth taking<p>Two years ago, Shinzo Abe's election as Japan's prime minister led to the advent of &quot;Abenomics&quot;, a three-part plan to rescue the economy from a treadmill of stagnation and deflation. Abenomics' three components – or &quot;arrows&quot; – comprise massive monetary stimulus in the form of quantitative and qualitative easing (QQE), including more credit for the private sector; a short-term fiscal stimulus, followed by consolidation to reduce deficits and make public debt sustainable; and structural reforms to strengthen the supply side and potential growth.</p><p>It now appears – based on European Central Bank president Mario Draghi's recent Jackson Hole speech – that the ECB has a similar plan in store for the eurozone. The first element of &quot;Draghinomics&quot; is an acceleration of the structural reforms needed to boost the eurozone's potential output growth. Progress on such vital reforms has been disappointing, with more effort made in some countries (Spain and Ireland, for example) and less in others (Italy and France, to cite just two).</p> <a href="http://www.theguardian.com/business/2014/sep/01/draghinomics-abenomics-european-style">Continue reading...</a>Mario DraghiEuropean Central BankShinzo AbeBusinessEurozone crisisEconomicsEuropean banksFinancial crisisEuroEuropeQuantitative easingJapanAsia PacificDeflationMon, 01 Sep 2014 10:17:15 GMThttp://www.theguardian.com/business/2014/sep/01/draghinomics-abenomics-european-styleMichael Probst/APMario Draghi may follow Japan's 'Abenomics' principles – a three-pronged plan to ward off off deflation and stagnation in the eurozone. Photograph: Michael Probst/APMichael Probst/APMario Draghi may follow Japan's 'Abenomics' principles – a three-pronged plan to ward off off deflation and stagnation in the eurozone. Photograph: Michael Probst/APNouriel Roubini2014-09-01T10:17:15ZGermany's current-account surplus is partly to blame for eurozone stagnationhttp://www.theguardian.com/business/2014/jul/24/germany-surplus-part-blame-eurozone-stagnation
With Germany unwilling to spend, it is up to ECB president Mario Draghi to devalue the currency for a much-needed boost<p>While the rest of the world recovers from the great recession of 2008-2009, Europe is stagnating. Eurozone growth is expected to be 1.7% next year. What can be done about it?</p><p>One solution is a weaker euro. Earlier this month, the chief executive of Airbus called for drastic action to reduce the value of the euro against the dollar by about 10%, from a &quot;crazy&quot; $1.35 to between $1.20 and $1.25. The European Central Bank (ECB) cut its deposit rates from 0 to -0.1%, effectively charging banks to keep money there, but these measures had <a href="https://www.ecb.europa.eu/stats/exchange/eurofxref/html/eurofxref-graph-usd.en.html" title="">little effect on foreign exchange markets.</a></p> <a href="http://www.theguardian.com/business/2014/jul/24/germany-surplus-part-blame-eurozone-stagnation">Continue reading...</a>Eurozone crisisWorld newsEuropean UnionEuropean monetary unionEconomicsEuropean banksFinancial crisisFinancial sectorEuropeBusinessGermanyInternational tradeEuroThu, 24 Jul 2014 14:50:59 GMThttp://www.theguardian.com/business/2014/jul/24/germany-surplus-part-blame-eurozone-stagnationGeorges Gobet/AFP/Getty ImagesMario Draghi, the president of the European Central Bank. Photograph: Georges Gobet/AFP/Getty ImagesGeorges Gobet/AFP/Getty ImagesMario Draghi, the president of the European Central Bank. Photograph: Georges Gobet/AFP/Getty ImagesRobert Skidelsky2014-07-24T14:50:59ZThe European debt wishhttp://www.theguardian.com/business/2014/jul/07/europes-debt-wish-kenneth-rogoff-project-syndicate
There are no easy answers to solve Europe's public and private debt crisis - what worked for Germany hasn't worked for Spain<p>Eurozone leaders continue to debate how best to reinvigorate economic growth, with French and Italian leaders now arguing that the eurozone's rigid &quot;fiscal compact&quot; should be loosened. Meanwhile, the leaders of the eurozone's northern members countries continue to push for more serious implementation of structural reform.</p><p>Ideally, both sides will get their way, but it is difficult to see an endgame that does not involve significant debt restructuring or rescheduling. The inability of Europe's politicians to contemplate this scenario is placing a huge burden on the European Central Bank.</p> <a href="http://www.theguardian.com/business/2014/jul/07/europes-debt-wish-kenneth-rogoff-project-syndicate">Continue reading...</a>EconomicsEconomic recoveryBusinessEurozone crisisWorld newsEuropean UnionEuropean monetary unionBankingEuropean banksFinancial crisisFinancial sectorEuroEuropeAusterityMon, 07 Jul 2014 10:29:50 GMThttp://www.theguardian.com/business/2014/jul/07/europes-debt-wish-kenneth-rogoff-project-syndicateGEORGES GOBET/AFP/Getty ImagesEurozone countries are now debating structural reform to ease its debt woes. Photograph: AFPGetty ImagesEurozone flag. Photograph: 42782.000000/Getty ImagesKenneth Rogoff2014-07-07T10:29:50ZEurozone's economic troubles are far from overhttp://www.theguardian.com/business/2014/may/12/eurozone-economic-troubles-far-from-over
If we have learned one thing from the last four years, it is that the European Union lacks the capacity to act decisively, writes <strong>Barry Eichengreen</strong><p>This month marks the fourth anniversary of <a href="http://www.imf.org/external/pubs/ft/survey/so/2010/car050210a.htm" title="">the May 2010 financial rescue of Greece</a>. Previously, the idea that a eurozone member would seek emergency assistance from the International Monetary Fund, along with the European Commission and the European Central Bank, was unthinkable. The rescue thus marked Europe's descent into full-blown crisis.</p><p>Four years later, European officials are assuring everyone that the crisis is over. The IMF has <a href="http://www.imf.org/external/pubs/ft/weo/2014/01/pdf/text.pdf#page=20" title="">raised its forecast for eurozone growth</a> this year to 1.2%. Even Greece is forecast to grow by a modest but not insignificant 0.6%.</p> <a href="http://www.theguardian.com/business/2014/may/12/eurozone-economic-troubles-far-from-over">Continue reading...</a>GreeceEuropeWorld newsEuropean banksBusinessEurozone crisisEuropean UnionEuropean monetary unionEconomicsFinancial crisisFinancial sectorSpainEuropean Central BankMon, 12 May 2014 14:07:40 GMThttp://www.theguardian.com/business/2014/may/12/eurozone-economic-troubles-far-from-overAris Messinis/AFP/Getty ImagesThis month marks the fourth anniversary of the May 2010 financial rescue of Greece. Photograph: Aris Messinis/AFP/Getty ImagesAris Messinis/AFP/Getty ImagesThis month marks the fourth anniversary of the May 2010 financial rescue of Greece. Photograph: Aris Messinis/AFP/Getty ImagesBarry Eichengreen2014-05-12T14:07:40ZEurozone crisis: can the centre hold? | Nouriel Roubinihttp://www.theguardian.com/business/2013/sep/30/eurozone-crisis-euro-european
The patient may appear to be on the mend. But with chill winds blowing in from the European periphery, the euro is far from safe<p>A little more than a year ago, in the summer of 2012, the eurozone, faced with growing fears of a Greek exit and unsustainably high borrowing costs for Italy and Spain, appeared to be on the brink of collapse. Today, the risk that the monetary union could disintegrate has diminished significantly – but the factors that led to it remain largely unaddressed.</p><p>Several developments helped to restore calm. The European Central Bank (ECB) president, Mario Draghi, vowed to do &quot;whatever it takes&quot; to save the euro, and quickly institutionalised that pledge by establishing the ECB's &quot;outright monetary transactions&quot; programme to buy distressed eurozone members' sovereign bonds. The European stability mechanism (ESM) was created, with €500bn (&pound;419bn) at its disposal to rescue eurozone banks and their home governments. Some progress has been made on a European banking union. And Germany has come to understand that the eurozone is as much a political project as an economic one.</p> <a href="http://www.theguardian.com/business/2013/sep/30/eurozone-crisis-euro-european">Continue reading...</a>Eurozone crisisEuroEuropean Central BankEuropean UnionEuropean monetary unionEconomicsBankingEuropean banksBasel IIIFinancial crisisItalyGermanyFinancial sectorEuropeWorld newsBusinessMon, 30 Sep 2013 15:30:52 GMThttp://www.theguardian.com/business/2013/sep/30/eurozone-crisis-euro-europeanWolfgang Kumm/dpa/CorbisGermany, under Angela Merkel, has resisted the risk-sharing aspects of closer union, fearing a 'transfer union'. Photograph: Wolfgang Kumm/dpa/CorbisWolfgang Kumm/dpa/CorbisGermany, under Angela Merkel, has resisted the risk-sharing aspects of closer union, fearing a 'transfer union'. Photograph: Wolfgang Kumm/dpa/CorbisNouriel Roubini2013-09-30T15:30:52ZEurozone collapse has been avoided but a hard landing is still possiblehttp://www.theguardian.com/business/2013/sep/12/eurozone-collapse-avoided-hard-landing
So long as European banks remain undercapitalised and overleveraged, a sustainable recovery supported by robust bank lending is unlikely<p>The eurozone crisis is over, or so we are being told. But can a couple of quarters of economic growth support claims of recovery?</p><p>There is no doubt that the outlook for Europe has brightened since early 2012. Ten eurozone countries had just been downgraded by the ratings agency Standard &amp; Poor's. Economic activity was spiraling downward, while nervous investors were fleeing southern European banks. The Spanish government was about to nationalize Bankia, the country's fourth-largest bank, but could not say where it would obtain the funds to recapitalise it. Interest rates on government bonds were racing upward.</p> <a href="http://www.theguardian.com/business/2013/sep/12/eurozone-collapse-avoided-hard-landing">Continue reading...</a>Eurozone crisisWorld newsEuropean UnionEuropean monetary unionEconomicsBankingEuropean banksFinancial crisisFinancial sectorEuroEuropeBusinessThu, 12 Sep 2013 14:27:58 GMThttp://www.theguardian.com/business/2013/sep/12/eurozone-collapse-avoided-hard-landingBoris Roessler/EPAEuropean Central Bank (ECB) in Frankfurt Main, Germany. The spectre of a collapse of Europe’s banks, like the specter of a self-fulfilling debt crisis, has been banished, allowing Europe’s nose-diving economies to pull up in time. Photograph: Boris Roessler/EPABoris Roessler/EPAEuropean Central Bank (ECB) in Frankfurt Main, Germany. The spectre of a collapse of Europe’s banks, like the specter of a self-fulfilling debt crisis, has been banished, allowing Europe’s nose-diving economies to pull up in time. Photograph: Boris Roessler/EPABarry Eichengreen2013-09-12T14:27:58ZEurozone's latest game of financial hide-and-seekhttp://www.theguardian.com/business/2013/aug/28/eurozone-financial-hide-and-seek
The game started with the bailout fund for Greece, which was followed by the European Financial Stability Facility, the European Financial Stability Mechanism, and the International Monetary Fund, which in turn were relieved by the ESM<p>Last June, the European Commission announced its about-face on bank restructuring. The money for recapitalising distressed banks would now come primarily from creditors, not European taxpayers, with a pecking order to specify which lenders would be repaid first. All of this is welcome, at least in principle. In practice, however, the scheme leaves much to be desired.</p><p></p> <a href="http://www.theguardian.com/business/2013/aug/28/eurozone-financial-hide-and-seek">Continue reading...</a>European Central BankWorld newsEuropean UnionEconomicsEuropeBusinessEurozone crisisEuropean banksFinancial sectorWed, 28 Aug 2013 14:49:32 GMThttp://www.theguardian.com/business/2013/aug/28/eurozone-financial-hide-and-seekHannelore Foerster/Getty ImagesBy weakening safety standards, bailing out foreign investors, and financing current-account deficits, the European Central Bank has undercut and replaced the private European interbank market. Photograph: Hannelore Foerster/Getty ImagesHannelore Foerster/Getty ImagesBy weakening safety standards, bailing out foreign investors, and financing current-account deficits, the European Central Bank has undercut and replaced the private European interbank market. Photograph: Hannelore Foerster/Getty ImagesHans-Werner Sinn2013-08-28T14:49:32ZMyths about the birth of the euro | Harold Jameshttp://www.theguardian.com/business/economics-blog/2012/nov/07/myths-birth-euro
The euro was not devised in a fit of giddy and irresponsible optimism – or panic at the prospect of German hegemony<p>Europe's politicians nowadays are desperately looking for someone to blame for the euro crisis. Germany blames France, and vice versa. Even lawyers are getting into the act, trying to identify legal responsibility for the monetary union's design flaws.</p><p></p> <a href="http://www.theguardian.com/business/economics-blog/2012/nov/07/myths-birth-euro">Continue reading...</a>EconomicsBusinessEurozone crisisWorld newsEuropean UnionEuropean monetary unionBankingEuropean banksWed, 07 Nov 2012 10:38:38 GMThttp://www.theguardian.com/business/economics-blog/2012/nov/07/myths-birth-euroDiana Walker/Time & Life Pictures/Getty ImageJacques Delors (2nd left) with world leaders in 1991, two years after his report laid the euro blueprint. Photograph: Diana Walker/Time & Life Pictures/Getty ImageDiana Walker/Time & Life Pictures/Getty ImageJacques Delors (2nd left) with world leaders in 1991, two years after his report laid the euro blueprint. Photograph: Diana Walker/Time & Life Pictures/Getty ImageHarold James2012-11-07T10:38:38ZUnited States of Europe: can it ever be achieved?http://www.theguardian.com/business/economics-blog/2012/oct/23/united-states-of-europe-achieved
A united Europe is a concept that many refuse to accept, because they do not believe in the possibility of a unified European identity<p>The motto of the United States of America is &quot;E pluribus unum&quot; (Out of many, one). The European Union's motto is &quot;In varietate concordia&quot;, which is officially translated as &quot;United in diversity&quot;. It is difficult to express the differences between the US and the European model any more clearly than this. The US is a melting pot, whereas Europe is a mosaic of different peoples and cultures that has developed over the course of its long history.</p><p>That difference raises the question of whether it is worth striving for a United States of Europe – a concept that many refuse to accept, because they do not believe in the possibility of a unified European identity. A single political system like that of the US, they insist, presupposes a common language and a single nationality.</p> <a href="http://www.theguardian.com/business/economics-blog/2012/oct/23/united-states-of-europe-achieved">Continue reading...</a>Eurozone crisisWorld newsEuropean monetary unionEconomicsEuroEuropeBusinessEuropean Central BankEuropean banksGlobal economyTue, 23 Oct 2012 14:04:49 GMThttp://www.theguardian.com/business/economics-blog/2012/oct/23/united-states-of-europe-achievedMarco Prosch/Getty Imagesrench actor Frank Samson (L) reenacts the 1813 Battle of Leipzig as Napoleon during the Napoleonic War on near Leipzig, Germany. In the 1813 battle a coalition of Russian, Prussian, Austrian and Swedish armies defeated Napoleon in a raging, four-day battle that involved 600,000 soldiers, the most number of troops ever involved in a single battle in Europe prior to the first world war.
Photograph: Marco Prosch/Getty ImagesMarco Prosch/Getty Imagesrench actor Frank Samson (L) reenacts the 1813 Battle of Leipzig as Napoleon during the Napoleonic War on near Leipzig, Germany. In the 1813 battle a coalition of Russian, Prussian, Austrian and Swedish armies defeated Napoleon in a raging, four-day battle that involved 600,000 soldiers, the most number of troops ever involved in a single battle in Europe prior to the first world war.
Photograph: Marco Prosch/Getty ImagesHans-Werner Sinn2012-10-23T14:04:49ZEurope's immigration challengehttp://www.theguardian.com/business/economics-blog/2012/jul/24/europe-immigration-challenge
Migration is changing in fundamental ways, and we must continue to push ourselves to devise systems and approaches that respond to new realities<p>Europe faces an immigration predicament. Mainstream politicians, held hostage by xenophobic parties, adopt anti-immigrant rhetoric to win over fearful publics, while the foreign-born are increasingly marginalised in schools, cities, and at the workplace. Yet, despite high unemployment across much of the continent, too many employers lack the workers they need. Engineers, doctors, and nurses are in short supply; so, too, are farmhands and health aides. And Europe can never have enough entrepreneurs, whose ideas drive economies and create jobs.</p><p>The prevailing scepticism about immigration is not wholly unfounded. Many communities are genuinely polarised, which makes Europeans understandably anxious. But to place the blame for this on immigrants is wrong, and exacerbates the problem. We are all at fault.</p> <a href="http://www.theguardian.com/business/economics-blog/2012/jul/24/europe-immigration-challenge">Continue reading...</a>EconomicsBusinessEurozone crisisWorld newsEuropean UnionEuropean monetary unionBankingEuropean banksFinancial crisisFinancial sectorEuroEuropeTue, 24 Jul 2012 07:12:08 GMThttp://www.theguardian.com/business/economics-blog/2012/jul/24/europe-immigration-challengeAlamyThe issue is not how many new immigrants are accepted into the EU, but acknowledging the nature and composition of the societies in which we already live. Photograph: AlamyAlamyThe issue is not how many new immigrants are accepted into the EU, but acknowledging the nature and composition of the societies in which we already live. Photograph: AlamyPeter D Sutherland and Cecilia Malmstrom2012-07-24T07:12:08ZEuropean banking union raises unanswerable questionshttp://www.theguardian.com/business/economics-blog/2012/jun/29/eurozone-banking-union-questions
The merits of a banking union are many – but proposals to establish one raise questions that cannot currently be answered<p>In the last few weeks, the idea of establishing a European banking union has become the latest remedy advanced as a solution to the long-running euro crisis. But, whatever the merits of a banking union – and there are many – proposals to establish one raise more questions than can currently be answered.</p><p></p> <a href="http://www.theguardian.com/business/economics-blog/2012/jun/29/eurozone-banking-union-questions">Continue reading...</a>Eurozone crisisBusinessWorld newsEuropean UnionEuropean monetary unionEconomicsBankingEuropean banksFinancial crisisFinancial sectorEuroEuropeFri, 29 Jun 2012 10:38:03 GMThttp://www.theguardian.com/business/economics-blog/2012/jun/29/eurozone-banking-union-questionsMichael Probst/APSome see banking union as a leap forward in the construction of a European super-state. Photograph: Michael Probst/APMichael Probst/APSome see banking union as a leap forward in the construction of a European super-state. Photograph: Michael Probst/APHoward Davies2012-06-29T10:38:03ZSpain's banking bailout is a missed opportunityhttp://www.theguardian.com/business/economics-blog/2012/jun/27/spain-banking-bailout-missed-opportunity
Spain's banking crisis provides a perfect opening to move towards a European banking union<p>The line of credit to Spain from fellow eurozone governments may help to stabilise a fragile banking system, at least in the short term, but it is a missed opportunity. Spain's banking crisis provides a perfect opening to move towards a European banking union.</p><p></p> <a href="http://www.theguardian.com/business/economics-blog/2012/jun/27/spain-banking-bailout-missed-opportunity">Continue reading...</a>Eurozone crisisBusinessWorld newsEuropean UnionBankingEuropean banksFinancial crisisEuropeBanking reformSpainWed, 27 Jun 2012 10:50:30 GMThttp://www.theguardian.com/business/economics-blog/2012/jun/27/spain-banking-bailout-missed-opportunitySergio Perez/ReutersBankia was one of the Spanish banks which sought government support. Photograph: ReutersSergio Perez/ReutersBankia, Spain's fourth biggest lender, has already been forced to seek government support in the Spanish banking crisis. Photograph: Sergio Perez/ReutersXavier Vives2012-06-27T10:50:30ZSocialising bank debt will plunge Europe into a deeper crisishttp://www.theguardian.com/business/2012/jun/13/socialising-bank-debt-europe-deeper-crisis
Rather than imposing the costs of the ECB's and EFSF's losses on European taxpayers, debt-equity swaps would be a much better way to recapitalise the banks<p>In blatant violation of the Maastricht Treaty, the European commission has come forward with one bailout plan after another for Europe's distressed economies. Now it wants to socialise not only government debt by introducing <a href="http://www.guardian.co.uk/business/2012/may/24/eurobonds-an-essential-guide" title="">eurobonds</a>, but also banking debt by proclaiming a &quot;banking union.&quot;</p><p>Socialising bank debt is both unjust and will result in a future misallocation of resources. Socialisation of bank debt across borders implies that a country's private borrowing costs are artificially reduced below market rates, as insurance (in the form of credit-default swaps) is provided free of charge by other countries. Thus, capital flows from the core to the periphery would continue to exceed the optimal amount, undermining growth for Europe as a whole.</p> <a href="http://www.theguardian.com/business/2012/jun/13/socialising-bank-debt-europe-deeper-crisis">Continue reading...</a>European banksWorld newsBankingFinancial sectorEuropeBusinessEconomicsWed, 13 Jun 2012 14:50:05 GMThttp://www.theguardian.com/business/2012/jun/13/socialising-bank-debt-europe-deeper-crisisPaul White/APProtesters outside a Caja de Madrid/Bankia with a banner reading 'Bankia is ours' in Madrid. Photograph: Paul White/APPaul White/APProtesters outside a Caja de Madrid/Bankia with a banner reading 'Bankia is ours' in Madrid. Photograph: Paul White/APHans-Werner Sinn2012-06-13T14:50:05ZGermany must take control of the eurozone crisis - before it's too late | George Soroshttp://www.theguardian.com/business/2012/jun/07/germany-take-control-eurozone-crisis
European authorities, with Germany at the centre, have a three-month window during which they can still correct their mistakes and reverse current trends<p>It is now clear that the main cause of the euro crisis is the member states' surrender of their right to print money to the European Central Bank. They did not understand just what that surrender entailed - and neither did the European authorities.</p><p>When the euro was introduced, regulators allowed banks to buy unlimited amounts of government bonds without setting aside any equity capital, and the ECB discounted all eurozone government bonds on equal terms. Commercial banks found it advantageous to accumulate weaker countries' bonds to earn a few extra basis points, which caused interest rates to converge across the eurozone. Germany, struggling with the burdens of reunification, undertook structural reforms and became more competitive. Other countries enjoyed housing and consumption booms on the back of cheap credit, making them less competitive.</p> <a href="http://www.theguardian.com/business/2012/jun/07/germany-take-control-eurozone-crisis">Continue reading...</a>Eurozone crisisBusinessWorld newsEuropean banksEuropean UnionEconomicsAngela MerkelEuroEuropeEuropean Central BankGermanyThu, 07 Jun 2012 11:54:57 GMThttp://www.theguardian.com/business/2012/jun/07/germany-take-control-eurozone-crisisSean Gallup/Getty ImagesGerman Chancellor Angela Merkel greets British Prime Minister David Cameron in Berlin, Germany. Germany has a pivotal role to play in solving the eurozone crisis. Photograph: Sean Gallup/Getty ImagesSean Gallup/Getty ImagesGerman Chancellor Angela Merkel greets British Prime Minister David Cameron in Berlin, Germany. Germany has a pivotal role to play in solving the eurozone crisis. Photograph: Sean Gallup/Getty ImagesGeorge Soros2012-06-07T11:54:57ZEuropean Central Bank in a fix over Greek debthttp://www.theguardian.com/business/economics-blog/2012/feb/06/european-central-bank-greek-debt
The ECB may be putting the interests of the few banks that have written credit-default swaps before those of Greece, Europe's taxpayers, and creditors<p>Nothing illustrates better the political crosscurrents, special interests, and shortsighted economics now at play in Europe than <a href="http://www.guardian.co.uk/business/2012/feb/06/greece-bailout-talks-eurozone-debt-crisis" title="">the debate over the restructuring of Greece's sovereign debt</a>. Germany insists on a deep restructuring – at least a 50% &quot;haircut&quot; for bondholders – whereas the European Central Bank insists that any debt restructuring must be voluntary.</p><p>In the old days – think of the 1980s Latin American debt crisis – one could get creditors, mostly large banks, in a small room, and hammer out a deal, aided by some cajoling, or even arm-twisting, by governments and regulators eager for things to go smoothly. But, with the advent of debt securitisation, creditors have become far more numerous, and include hedge funds and other investors over whom regulators and governments have little sway.</p> <a href="http://www.theguardian.com/business/economics-blog/2012/feb/06/european-central-bank-greek-debt">Continue reading...</a>EconomicsBusinessEuropean Central BankEurozone crisisEuropean banksCredit crunchBankingBanking reformFinancial crisisGreeceGermanyEuropean UnionMon, 06 Feb 2012 14:46:52 GMThttp://www.theguardian.com/business/economics-blog/2012/feb/06/european-central-bank-greek-debtMichael Probst/APSkyline including the European Central Bank: ECB may be putting the interests of the few banks that have written credit-default swaps before those of Greece, Europe’s taxpayers, and creditors. Photograph: Michael Probst/APMichael Probst/APSkyline including the European Central Bank: ECB may be putting the interests of the few banks that have written credit-default swaps before those of Greece, Europe’s taxpayers, and creditors. Photograph: Michael Probst/APJoseph Stiglitz2012-02-06T14:46:52Z